TaxTMI 
TaxTMI 
2011 (10) TMI 369
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....ime to time. On 02.02.2009 the assessee filed an application in Form No.10-G seeking for renewal of the recognition under Section 80-G of the I.T. Act for the relevant assessment years. The authority on receipt of the said applications noticed certain deficiencies and by letter dated 06.03.2009 called upon them to furnish particulars mentioned in the said letter. On receipt of the same, the assessee furnished the details called for on 23.09.2009. Further clarification sought for was also furnished by the assessee. In the statement of accounts for the past three years, i.e., 31.03.2006, 31.03,2007 and 31.03.2008, the assessee computed the income under Section 11(1). The capitalised receipts of Rs. 13.86.199/-, Rs. 1.11.37,611/- and Rs. 19,33,268/- for the financial year 2005-06, 2006-07 and 2007-08 respective as Rural Project fund. The assess was asked to explain the nature and purpose of the said fund and also as to why the said amount is not considered for computation of 85% application under Section 11(1) of the I.T. Act for the respective years. The assessee replied by a letter dated 22.07.2009 contending that the area of operation of the assessee-trust is in a remote place of t....
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....irector of Income Tax Department has treated such corpus donations as expendable income of the trust. He was wrong in that regard by excluding the same from the expandable income of the assessee. He erred in not treating donations of the rural project fund as corpus donations only, for the reason that the capital fund has been designated as special fund in the name of Rural Project Fund. It does not cease to be the capital fund. After examining the details of the activities carried on by the trust, they were satisfied that the assessee is carrying on expandable charitable works in rural areas especially in the field of medical care, namely eradication of leprosy. By virtue of the charitable activities carried on, it is entitled for the benefit of Section 11(1) as well. Therefore, they set aside the order of the Director of Income Tax (Exemptions) and directed him to pass an order making recognition to the assessee for the purpose of Section 80-G of the Act. Aggrieved by the said order, the revenue is in appeal. 4. Learned counsel for the revenue assailing the impugned order contended that, for the said amount to constitute corpus fund, the required law is that the said contributio....
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....educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or by any hospital or other institution referred to in sub clause (iiiae) or sub-clause (via) of clause (23C) of Section 10 Explanation - For the purposes of this sub-clause, trust" includes any other legal obligation: (iii) the value of any perquisite or profit in lieu of salary taxable under clauses (2) and (3) of Section 17; (iiia) any special allowance or benefit, other than perquisite included under sub-clause (iii), specifically granted to the assessee to meet expenses wholly, necessarily and exclusively for the performance of the duties of an office or employment of profit; (iiib) any allowance granted to the assessee either to meet his personal expenses at the place where the duties of his office or employment of profit are ordinarily performed by him or at a place where he ordinarily performed by him or at a place where he ordinarily resides or to compensate him for the increased cost of living; (iv) the value of any benefit or perquisite, whether convertible into money or not, obtained from a company either by a director or by a person who has a substantial interest in the company, or ....
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....s as under: "Income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution." 11. The word 'corpus' is not defined under the Act. We do not find any judgment explaining the meaning of 'corpus'. In the Chambers 21st Century Dictionary, the meaning of the word 'corpus' has been given as under: (i) body of writings, eg: by a particular author, on a particular topic, etc.; (ii) a body of written and/or spoken material for language research; (iii) anatomy any distinct mass of body tissue that may be distinguished from its surroundings. Latin: meaning- 'body'. 12. In the Law Lexicon of P. Ramanatha Aiyar, 2nd Edition reprint-208 the meaning of the word 'Corpus' is given as under: "A Body; human body; an artificial body created by law; as a corporation; a body or collection of laws; a material substance; something visible and tangible; as the subject of a right; something having legal position as distinguished from an incorporeal physical substance as distinguished from intellectual conception; the body of estate; or a capital of on estate". 13. The word 'Corpus' is used in the con....
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....tion of the donor and (ii) how the recipient-assessee treat the said income. If the intention of the donor is that the amount/donation given is to be treated as capital and the income from that capital has to be utilised for the charitable purposes, then the said voluntary contribution is towards the part of the corpus of the trust. Similarly, the assessee after receiving the amount, keeps the amount in deposit and only utilise the income from the deposit to carry out the charitable activities, then also the said amount would be a contribution to the corpus of the trust and the nomenclature in which the amount is kept in deposit is of no relevance as long as the contribution received are kept in deposit as capital and only the income from the said capital which is to be utilised for carrying on charitable and religions activities of the institute/corpus of the trust, for which Section 11(i)(d) of the Act is attracted and the said income is not liable for tax tinder the Act. 16. In this background, we look at the facts of the case. It is not in dispute that the assessee is registered by the income tax authorities as a person carrying on charitable and religious activities under Sec....
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....ada, the border districts of Karnataka-Andhra Pradesh. They received voluntary contributions from philanthropers and they have accumulated the said amount under the head of Rural Health Project. All the contributions received are kept in fixed deposit. In other words, no portion of the contribution received is utilised for this project. It shows the intention of the assessee is to treat these contributions as corpus and the income derived from the corpus is used for carrying on the said activities. 17. Insofar as the argument that the persons who made these contributions does not specifically direct that they shall form part of the corpus of the trust is concerned, it has no substance. In view of the language employed in Clause (b) of sub-section (a) of Section 11, the requirement is that the voluntary contributions have to be made with a specific direction. The law does not require that the said direction should be in writing. In the absence of the direction in writing, the only way that one can find out whether there was a specific direction and to find out how the money so paid it is utilized. if the money so received by way of voluntary contributions, it is meant to use for th....